1. Introduction
Under enforcement of competition law, the power to
conduct on-site inspections is regarded as one of the most effective tools
available to the authority for monitoring market conduct and uncovering
infringements. Set out under Article 15 of Law Nr. 4054 on the Protection of
Competition, this power plays a critical role particularly in detecting covert
violations such as cartels and the abuse of a dominant position. However, the
advancement of technology and the digitalization of business practices have not
only expanded the scope of on-site inspection powers but have also given rise
to new legal debates regarding the limits of these powers. In this context, the
inclusion of mobile devices, platforms containing personal data, and individual
communication tools within the scope of inspections creates certain conflicts
of interest in terms of constitutional rights, the protection of personal data,
and the limits of administrative sanctions. In particular, it would not be
inaccurate to state that, under current conditions, the interpretation of the
concept of “obstruction of on-site inspection” and the attribution of liability
arising from such conduct are being shaped through practice.
The Competition Board’s decision dated 21.05.2024 and
numbered 24-23/533-224 constitutes a concrete example of these debates. The
decision concerns a process in which an administrative fine—initially imposed
on a legal entity due to a natural person’s refusal to submit their mobile
device for inspection during an on-site inspection—was annulled by a judicial
ruling and subsequently redirected directly to the individual concerned. In
this respect, the decision serves as an important precedent both in terms of
the limits of on-site inspection powers and the identification of the subject
of liability. Indeed, although it is explicitly regulated within the framework
of competition law that sanctions may also be imposed on natural persons, this
is not a situation frequently encountered in practice.
2. Summary of the Case and the Legal Framework of the
Dispute
In this present case, an on-site inspection was
conducted at the District Representation Office of Alanya of the Union of
Chambers of Turkish Engineers and Architects, Chamber of Electrical Engineers,
within the scope of a preliminary investigation carried out by the Competition
Board. During the inspection, the mobile device of an individual who was a
member of the representation office was requested to be examined; however, the
individual refused to submit the device for inspection. Consequently, the Competition
Board assessed this conduct as the obstruction or hindrance of the on-site
inspection and imposed an administrative fine on the relevant chamber. However,
this decision was annulled by the 12th Administrative Court of
Ankara. The Court determined that the device subject to the inspection was the
individual’s personal phone, that it had no direct connection with the
representation office, and that the representation office had no obligation to
ensure that its members submit their personal devices for inspection. On these
grounds, it concluded that directing the administrative sanction to the legal
entity was unlawful. Following the judicial ruling, the Competition Board
conducted a new assessment in line with the Court’s reasoning and, this time,
imposed the administrative fine directly on the natural person who had refused
to submit their mobile device for inspection. Thus, while the addressee of the
sanction was changed with respect to the same act, the legal characterization of
the conduct was preserved.
3. Scope of the On-Site Inspection Authority and the
Issue of Personal Devices
The power to conduct on-site inspections is an
administrative authority that is interpreted broadly under enforcement of competition
law. Within the scope of this power, the Authority may examine undertakings’
books, documents, and electronic data, and may take copies thereof. However,
the limits of this power become contentious, particularly when personal devices
are concerned. In this present case, the Court’s approach makes a significant
contribution to this debate. The Court held that, unless a direct link can be
established between a personal mobile device and the corporate activities, the
failure to submit such a device for inspection cannot be attributed to the
legal entity. This approach is significant in delineating the boundaries of the
on-site inspection power. Indeed, in today’s business environment, there is an
increasing intertwinement between employees’ or members’ personal phones and
professional activities. However, this does not mean that every personal device
automatically falls within the scope of inspection. For an inspection to be
considered lawful, there must, at a minimum, be a reasonable connection between
the device in question and the undertaking’s activities. Where such a
connection has not been established, a refusal to comply with the request may
still be characterized as “obstruction”; however, the question of who bears
liability for such conduct must be assessed separately. In this present case as
well, this distinction proved to be decisive.
One of the most significant contributions of the
decision concerns the identification of the addressee of administrative
sanctions. Under the Competition Board’s initial decision, directing the
administrative fine to the undertaking is an approach frequently encountered
under the general logic of enforcement of competition law. However, the Court
found this approach unlawful and emphasized that liability must rest with the
person who actually committed the act. Accordingly, for an administrative
sanction to be imposed in respect of a conduct, the act must have been carried
out by the relevant person, and there must be a direct link between that person
and the conduct in question. In this present case, since no such link could be
established between the individual who refused to submit their mobile device
for inspection and the representation office, it was not considered possible to
hold the legal entity liable. By contrast, the liability of the person who
directly engaged in the conduct was accepted. This approach has a limiting
effect on the tendency to directly attribute employees’ or members’ individual
actions to the legal entity.
4. Broad Interpretation of the Concept of Undertaking
and Individual Liability
Another notable aspect of the Court’s judgment is the
classification of the relevant individual as an “undertaking” within the
meaning of competition law. This finding once again demonstrates the broad
interpretation of the concept of an undertaking in competition law. For the
purposes of competition law, an undertaking may encompass not only companies
but also natural persons engaged in economic activity. Accordingly, in this
present case, it was considered legally possible to impose an administrative
fine directly on the individual who refused to submit their mobile device for
inspection. This approach carries significant implications. First, individuals
must now recognize that they may be subject to competition law sanctions not
only through legal entities but also directly on the basis of their own
conduct. This creates an important sphere of responsibility, particularly for
self-employed professionals, consultants, and independent practitioners.
5. Interpretation of the Concept of Obstruction of
On-Site Inspections
In this present case, another noteworthy point is the
characterization of the failure to submit the mobile device for inspection as a
direct obstruction of the on-site inspection. At this juncture, there was no
divergence of views between the Board and the Court. The dispute rather focused
on the allocation of liability than on the legal nature of the act itself. This
situation demonstrates that the Competition Authority interprets its on-site
inspection powers quite broadly. The Authority adopts a strict approach by
directly linking non-compliance with inspection requests to sanctions. However,
this strictness is balanced by the requirement that liability be attributed to
the correct subject.
The emphasis on individual liability arising from the
decision will require undertakings to reassess their internal compliance
mechanisms. It becomes increasingly important to establish clearer and more
binding rules regarding how employees and members should behave during on-site
inspection processes.
6. Conclusion
The Competition Board’s decision dated 21.05.2024
represents an important approach in terms of striking a balance between the
authority to conduct on-site inspections and individual rights. The decision,
on the one hand, preserves the effectiveness of on-site inspections, while on
the other, clearly establishes that administrative sanctions must be directed
at the correct subject. In this respect, the decision goes beyond a purely
technical assessment under enforcement of competition law and reflects the application
of fundamental legal principles to a concrete case. In particular, in today’s
rapidly digitalizing environment, it can be said that this decision will play a
guiding role in clarifying the legal boundaries of inspections conducted
through personal devices and data.
Att. Melda İz
References:
1. Competition
Board’s Decision Nr. 24-23/533-224
2. Competition
Board’s Decision Nr. 22-48/698-296
3. Decision,
bearing the Basis number 2023/1049 and the Decision number 2024/460, of the 12th
Administrative Court of Ankara
